Canada Barley Output: 48.2% Malting and 44.3% General Purpose
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In MY 2022/23, Barley production increased 43 percent over the previous year, despite a 15 percent decrease in area planted as average yields improved significantly from the drought year 2021. The Canadian Grain Commission reports that the favorable growing conditions in 2022 positively affected the quality of malting Barley.
In MY 2022/24, Barley production is forecast down on lower yields which are expected to fall slightly to a trimmed five-year average (which excludes the 2021 drought year). This production forecast assumes that soil moisture conditions will improve further. Most Barley is planted in late April (in the southernmost regions of the prairies) to mid-May.
Barley is used for malting, food, and general purposes (feed and forage). According to crop insurance data, the area seeded with Barley in the Canadian prairies in 2022 consisted of 48.2 percent malting Barley, 44.3 percent general purpose Barley, and 2.4 percent food Barley. Not all malting Barley makes it into the malting channel due to quality issues.
As per the AgFlow data, Canada’s total Barley export volume hit 0.9 million tons in January-May 2023. Key markets were China (240,000 tons), South Korea (38,000 tons), and Japan (9,700 tons) in May. Exports are forecast to grow marginally on increased domestic supplies in MY 2023/24. China has become an essential buyer of Canadian Barley in recent years. Although demand from China can be unpredictable, the country has consistently purchased between 1.4 and 3.3 million MT each marketing year since 2018.
In August 2022 – February 2023 (YTD), exports rose 30 percent to 2.1 million MT from a year ago. Eighty-six percent of exports YTD were destined for China, where it is used to produce beer and feed livestock. This sustained elevated level of Barley exports to China comes during a time when China has a tariff placed a tariff on Australian Barley, which took effect in May 2020. Canada is a net exporter of Barley, and historically, almost all Barley imports have come from the United States. Imports of Barley YTD MY 2022/23 (August 2022 to February 2023) declined 86 percent from the same period of the previous year due to improved domestic feed supplies.
The season-ending stocks are forecast to fall marginally over MY 2022/23 on increased domestic consumption and exports. MY 2022/23 ending stocks are forecast to increase over the previous marketing year on increased domestic supply. This pushes stocks further in line with a trimmed five-year average stock level of 808,000 MT. The stocks-to-use ratio for Barley is forecast to remain steady at seven percent, historically low.
Oats Production in Canada
MY 2023/24 oat production is forecast to be down on the reduced area planted in Saskatchewan. Poor returns relative to competing for crops and high on-farm stocks are expected to incentivize farmers to grow competing crops, such as Barley, instead of Oats. Oat feed prices in Saskatchewan remain competitive with wheat, at CAD 270 per MT in mid-April. As in recent years, the area planted is expected to be concentrated in Saskatchewan (approximately 50 percent). Most Oats are planted close to mid-May.
Consumption in MY 2023/24 is forecast to remain historically high but fall marginally from MY 2022/23 on expected lower production of Oats. Paterson Foods is constructing an oat mill outside Winnipeg, Manitoba, known as O Foods Ltd, and is expected to have a capacity of 250,000 MT. O Foods plans to supply the industry by late 2023. The facility’s site is logistically advantageous due to service by Canadian National (CN), Canadian Pacific (CP), and BNSF railways. Consumption in MY 2022/23 is forecast to increase on expanded domestic supplies.
Other sources: USDA
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